Yes, it's not easy to do a conventional vertical menu in this. I've been able to get something passable using these settings
here.

Alternatively, Dave enabled some jQuery treemenu bits in 1.1.7 and you'll find the "shows tree menu" setting will display it. You then need to tick the boxes for the other menu bits to hide them, or you'll see two menus.

In order for the treemenu to (at least partially) work right and always expand to the currently selected category, you'll have to update the code in the jqtreeview.code template: